This problem has two parts. In Part A, you are asked to do account analysis based on cost and activity information that you are given for one particular month. Account analysis is illustrated in the second lecture on cost estimation and in study problem 3-36. In Part B, you are asked to do the high-low method based on cost and activity information that you are given for two particular months. The high-low method is also illustrated in the second cost estimation lecture and in study problems 3-47, 3-44, and Extra #3. NOTE that the data that you must use to get the cost function parameters for Part A are completely different than the data you must use for Part B. However, for both parts, you must make predictions for the same month. Also, be sure to read each question very carefully. Each part of the problem is worth five points and has two questions. There is no partial credit within a part, so to get the five points for a part, you must answer both questions correctly. You get six tries per part (not per individual question).

Lorenzo operates a brushless car wash. Incoming cars are put on an automatic, continuously moving conveyor belt. A car is washed as the conveyor belt carries it from the start station to the finish station. After the car moves off the conveyor belt, workers dry it and clean and vacuum the inside. Workers are managed by a single supervisor. Lorenzo's accountant wants to estimate total costs in December, when 10,950 cars are expected to be washed. She uses two different methods to estimate total December costs, account analysis and high-low, with number of cars washed as the independent variable for both methods. For the account analysis method, she developed cost function parameter estimates by analyzing actual costs in February, when 11,100 cars were washed. The following are February total costs and her variable cost estimates:

For the high-low method, she developed cost function parameter estimates by using the actual costs in April and May, when 8,300 and 11,000 cars were washed, respectively. The following are total costs for these two months:

Part A)

1. Using account analysis, what is the accountant's estimate of total fixed costs for December?

2. Using account analysis, what is the accountant's estimate of variable costs per unit for December?

Part B)

1. Using the high-low method, what is the accountant's estimate of total fixed costs for December?

2. Using the high-low method, what is the accountant's estimate of total variable costs for December?

PLEASE SHOW WORK SO I CAN RATE HIGHLY

Cost Item Soap, cloths, and supplies Water Car wash labor Power for conveyor Supervisor and cashier Total Cost $6,660 $6,660 $34,870 $11,420 $3,000 Variable Portion $6,660 $6,660 $32,190 $8,880 $0